[Federal Register Volume 63, Number 138 (Monday, July 20, 1998)]
[Proposed Rules]
[Pages 38767-38774]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18860]



[[Page 38767]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 86

[AMS-FRL-6124-1]


Optional Certification Streamlining Procedures for Light-Duty 
Vehicles, Light-Duty Trucks, and Heavy-Duty Engines for Original 
Equipment Manufacturers and for Aftermarket Conversion Manufacturers; 
Notice of Proposed Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rule.

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SUMMARY: In today's action, EPA is proposing to amend the current 
regulatory provisions regarding the certification of light-duty 
vehicles, light-duty trucks, and heavy-duty engines that meet the 
Clean-Fuel Vehicle (CFV) requirements. This proposed action would serve 
to ease the burden of certification for manufacturers of CFVs. EPA is 
also proposing to revise the definition for dedicated fuel systems to 
include CFVs with limited ability to operate on a conventional fuel, 
and is also proposing to amend current regulations to allow 
manufacturers of CFVs to group certain engine families together for 
certification purposes. In addition, EPA is proposing an exemption, for 
MY 1999, 2000 and 2001, from certification fees for dedicated gaseous-
fueled vehicles and engines that certify to EPA's Tier 1 standards as 
well as for all vehicles and engines that certify to EPA's CFV, Low-
Emission Vehicle (LEV), Ultra Low Emission Vehicle (ULEV), Inherently 
Low Emission Vehicle (ILEV), or Zero Emission Vehicle (ZEV) emission 
standards.

DATES: Any party who wishes to submit comments must do so by August 19, 
1998 unless a hearing is requested. Any person can request EPA to hold 
a public hearing on this action, but such request must be received by 
August 19, 1998. If a hearing is requested, it will take place on 
September 18, 1998, and interested parties will have an additional 30 
days after the hearing (until October 19, 1998) to submit comments on 
any information presented at the hearing. Because no hearing will 
occur, absent a request for one, interested parties should contact 
Clifford D. Tyree at the number listed below after August 19, 1998 to 
determine whether a hearing will take place.

ADDRESSES: Written comments should be submitted (in duplicate if 
possible) to: Air Docket Section (6102), Attention: Docket No. A-97-27, 
U.S. Environmental Protection Agency, 401 M Street, SW, Washington, 
D.C. 20460, or hand-delivered to the Air Docket at the above address, 
in Room M-1500, Waterside Mall. A copy of written comments should also 
be submitted to Clifford D. Tyree at the address below.
    Materials relevant to this notice of proposed rule are contained in 
Docket No. A-97-27, located at the Air Docket, 401 M Street SW, 
Washington, DC 20460, and may be reviewed in Room M-1500 from 8:00 a.m. 
until 5:30 p.m. on business days. As provided in 40 CFR Part 2, EPA may 
charge a reasonable fee for photocopying docket materials.

FOR FURTHER INFORMATION CONTACT: Mr. Clifford Tyree, Project Manager, 
U.S. EPA, National Vehicle and Fuel Emission Laboratory, Vehicle 
Programs and Compliance Division, 2565 Plymouth Road, Ann Arbor, MI 
48105-2425. Telephone: (734) 214-4310; FAX 734-214-4869. E-Mail, 
<a href="/cdn-cgi/l/email-protection#a5d1dcd7c0c08bc6c9ccc3c3cad7c1e5c0d5c4c8c4ccc98bc0d5c48bc2cad3"><span class="__cf_email__" data-cfemail="75010c0710105b16191c13131a07113510051418141c195b1005145b121a03">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Entities potentially regulated by this notice of proposed 
rulemaking are Original Equipment Manufacturers (OEMs) of Light-Duty 
Vehicles, Light-Duty Trucks (LDTs), and Heavy-Duty Engine (HDEs) 
manufacturers. In addition, aftermarket convertors of LDVs, LDTs, and 
HDEs will also be regulated. Entities include:

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                                                Examples of regulated   
                 Category                             entities          
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Auto industry of light-duty vehicles,       Original Equipment          
 light-duty trucks, and heavy-duty engines.  Manufacturers (OEMs) and   
                                             Aftermarket Converters.    
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    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
proposed action. This table lists the types of entities that EPA is now 
aware could potentially be regulated by this proposed action. Other 
types of entities not listed in the table could also be regulated. If 
you have questions regarding the applicability of this proposed action 
to a particular product, consult the person listed in the preceding FOR 
FURTHER INFORMATION CONTACT section.

Obtaining Electronic Copies of the Regulatory Documents

    The preamble, regulatory and other related documents are also 
available electronically from the EPA Internet Web site. This service 
is free of charge, except for any cost you already incur for internet 
connectivity. An electronic version is made available on the day of 
publication on the primary Web site listed below. The EPA Office of 
Mobile Sources also publishes Federal Register notices and related 
documents on secondary Web site listed below.
    1. http://www.epa.gov/docs/fedrgstr/EPA-AIR/(either select desired 
date or use Search feature.)
    2. http://www.epa.gov/OMSWWW/cff.htm
    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc. may occur.

I. Background <SUP>1</SUP>

    EPA's emissions standards and requirements for clean-fuel vehicles 
(CFVs) are contained in 40 CFR Part 88. These regulations include 
several sets of exhaust emissions standards for clean-fuel vehicles 
(CFVs): Transitional Low-Emission Vehicle (TLEV) standards, Low-
Emission Vehicle (LEV) standards, Inherently Low-Emission Vehicle 
(ILEV), Ultra Low-Emission Vehicle (ULEV) standards, and Zero-Emission 
Vehicle (ZEV) standards. The regulations also apply all standards and 
requirements in 40 CFR Part 86 to CFVs, except the Part 86 exhaust 
emissions standards for those pollutants for which Part 88 establishes 
standards. The CFV standards apply to all CFVs, including those that 
operate on gaseous-fuels like compressed natural gas (CNG) and 
liquefied petroleum gas (LPG).
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    \1\ EPA has included in this notice a brief summary of the 
aftermarket conversion requirements and the Clean-Fuel Fleet 
program. Readers may consult EPA's current certification regulations 
in 40 CFR Parts 86 and EPA's clean fuel vehicle regulations in 40 
CFR part 88, as well as the following notices of final rulemaking: 
Emissions Standards for Clean Fuel Vehicles and Engines (59 FR 
50042, September 30, 1994) and Standards for Emissions from Natural 
Gas-fueled and Liquefied Petroleum Gas-fueled Motor Vehicles and 
Motor Vehicle Engines, and Certification Procedures for Aftermarket 
Conversions (59 FR 48471, September 21, 1994), for additional 
background information.
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    Section 246 of the Clean Air Act, as amended in 1990 (``CAA'' or 
``the Act''), requires states to adopt in their State Implementation 
Plans (SIP) a Clean-fuel Fleet Program (CFFP) for certain ozone and 
carbon monoxide nonattainment areas. The states' CFFPs must require 
that fleet operators with central fueling capability shall include a 
certain percentage of CFVs that meet LEV emissions standards in their 
vehicle purchases each year, and shall operate such vehicles on clean 
alternative-

[[Page 38768]]

fuels.<SUP>2</SUP> EPA is aware that fleet operators subject to CFFP 
requirements are concerned about sufficient availability of CFVs to 
meet such requirements. For the 1997 model year, one light-duty 
vehicle, two light-duty trucks, and five heavy-duty vehicle engine 
families have been certified to federal CFV standards.
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    \2\ A clean alternative fuel is defined as a fuel used in a 
vehicle that meets the CFV standards when operating on such fuel. 
See CAA Section 241(2).
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    The EPA's Office of Mobile Sources recently adopted a one-year 
delay in implementation of state CFFPs, due to concerns about 
sufficient CFV availability to meet fleet operator 
requirements.<SUP>3</SUP>
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    \3\ 40 CFR 88.304-98, Direct Final Rule, 63 FR 20103, April 23, 
1998.
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    In today's action, EPA is proposing to amend certain provisions 
intended to encourage and facilitate the certification of CFVs by 
reducing the costs of certifying in three specific areas. These 
provisions are described in detail below.

II. Today's Proposal

A. Definition of Dedicated Vehicle

    Current EPA regulations define a ``dual-fuel vehicle'' as a motor 
vehicle, or engine, engineered and designed to be operated on two 
different fuels, but not on a mixture of fuels.<SUP>4</SUP> A 
``dedicated vehicle'' is defined as a vehicle or engine engineered and 
designed to be operated using a single fuel.<SUP>5</SUP>
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    \4\ 40 CFR 88.102-94.
    \5\ 40 CFR 86.090-2.
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    There are specific requirements that apply to dual-fuel light-duty 
vehicles (LDVs) <SUP>6</SUP> and light light-duty trucks (LLDT) 
<SUP>7</SUP> certifying to the CFV emissions standards. A dual-fuel 
vehicle must comply with the applicable set of standards for each fuel 
on which it can operate. To qualify as CFVs for purposes of state 
CFFPs, dual-fuel vehicles must meet LEV (or more stringent) emissions 
standards on the clean alternative fuel and the TLEV non-methane 
organic gas (NMOG) emission standard on the conventional 
fuel.<SUP>8</SUP> On the conventional fuel, the vehicle must meet Tier 
1, NMOG and HCHO emission standards and also comply with all other 
motor vehicle emissions control requirements contained in 40 CFR Part 
86 (such as the cold temperature carbon monoxide standard (Cold CO), 
onboard diagnostic requirement (OBD), and certification short test 
(CST) requirements) that apply to comparable conventional gasoline 
vehicles.
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    \6\ 40 CFR 86.082-2, A light-duty vehicle (LDV) means a 
passenger car or passenger car derivative capable of seating 12 
passengers or less.
    \7\ 40 CFR 86.094-2, A light light-duty ( LLDT) means any light-
duty truck rated through 6,000 lbs. GVWR.
    \8\ Formaldehyde (HCHO) exhaust emission standards apply to any 
fuel used to meet CFV standards, including gasoline.
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    For vehicles with a dedicated fuel system to be a feasible option 
for fleets, many fleet operators will need the flexibility to operate 
on conventional fuel in emergency situations, when central fueling is 
impossible. If the fleet operator is subject to the CFFP, and is 
operating in a nonattainment area covered by the CFFP, he must operate 
the vehicle on a fuel on which the vehicle meets the CFV emissions 
standards to comply with the CFFP requirements. If the vehicle is 
certified to the LEV emissions standards on both fuels, the fleet 
operator would have the option of using the conventional fuel in the 
covered nonattainment area. However, if the vehicle is certified to the 
LEV standards only on CNG or LPG, that option would not be available.
    In light of the limited gaseous-fuel fueling stations in the 
nonattainment areas covered by a CFFP, fleet operators are concerned 
that the safety of vehicle operators and occupants could be at risk 
during inclement weather.<SUP>9</SUP> In addition, unforeseen traffic 
delays (or other unforeseen delays) may cause fleet vehicles to be 
stranded, resulting in higher costs for and reduced efficiency of the 
fleet. For these reasons, EPA has determined that it would be 
reasonable and appropriate to revise the definition of a dedicated 
vehicle to allow operation up to a limited mileage on a conventional 
fuel.
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    \9\ The CFFP requires fleet operators to operate their CFVs on 
clean alternative fuels only when in the covered nonattainment area. 
Therefore, for dual-fuel CFVs, fleet operators may use either the 
clean alternative fuel or the conventional fuel outside the covered 
nonattainment area.
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    As described above, fleet operators subject to the CFFP must 
operate their CFV's on a ``clean alternative fuel,'' as defined in CAA 
Section 241(2). To ensure that CFVs that operate on gaseous fuels are a 
feasible option for fleet operators covered by the CFFP, EPA would 
certify as dedicated CFVs vehicles meeting the CFV dual-fuel standards 
with limited ability to operate on a conventional fuel, as described 
above. EPA's issuance of such certificates is authorized by the 
Agency's authority to adopt de minimis exemptions to statutory 
requirements, and is consistent with Congressional intent.
    Section 246(b) of the CAA requires state CFFPs to provide that 
covered fleet operators must operate their clean-fuel vehicles on clean 
alternative fuels when operating in the covered nonattainment area. 
Clean alternative fuel, in turn, is defined as a fuel used in a CFV 
that meets applicable emissions standards and requirements when 
operating on such fuel. See Sec. 241(2). Courts have recognized EPA's 
authority to provide exemptions from CAA requirements when the burdens 
of regulation yield a gain of trivial or no value. Alabama Power v. 
Costle, 636 F.2d.323 (D.C. Cir. 1979). EPA believes that prohibiting 
gaseous-fueled vehicles capable of limited operation on gasoline from 
qualifying as CFVs would unnecessarily increase the burden of 
compliance with state CFFPs, and would not result in any emissions 
benefits.
    Allowing limited operation of such vehicles on gasoline in 
emergency situations would not result in any adverse emissions impacts. 
If a gaseous-fueled fleet vehicle is stranded within the nonattainment 
area due to lack of fuel, and cannot operate on gasoline, even for a 
limited number of miles, without violating the CFFP requirements, 
another vehicle would have to be dispatched to ``rescue'' the stranded 
vehicle and its occupants. The second vehicle may not be a CFV, 
especially if it is not owned by the covered fleet (e.g., if a tow 
truck was required to retrieve the stranded vehicle). This ``rescue 
operation'' will therefore result in emissions likely to be equivalent 
to, and perhaps in excess of, the incremental additional emissions 
resulting from the limited operation of the gaseous-fueled CFV on 
gasoline.
    In general, EPA expects that CFVs meeting the revised definition of 
dedicated vehicle would meet the Tier 1 emission standards when 
operating on conventional fuel. EPA expects that Original Equipment 
Manufacturers (OEMs) will produce vehicles that meet the revised 
definition of dedicated vehicle and have limited ability to operate on 
a conventional fuel by limiting the conventional fuel use function of 
dual-fuel vehicles (or engines) previously certified to Tier 1 
emissions standards on conventional fuel. Aftermarket conversion 
companies are likely to convert vehicles (or engines) previously 
certified to Tier 1 standards on a conventional fuel to operate on a 
gaseous fuel at least LEV emissions levels. If these vehicles are 
equipped with an emergency reserve tank with limited capacity for the 
conventional fuel, EPA expects that the vehicles' emissions on 
conventional fuel during emergency operation will be similar to the 
emissions of the vehicle prior to conversion (i.e., Tier 1 emissions 
levels). Therefore, EPA believes it would be appropriate for state 
CFFPs to allow fleet operators to purchase dedicated gaseous-fueled 
vehicles that have limited ability to operate on gasoline, and to 
operate for

[[Page 38769]]

limited mileage on gasoline in emergency situations in the covered 
nonattainment area.
    EPA regulations define the term ``centrally fueled'' as meaning a 
fleet, or that part of a fleet, consisting of vehicles that are fueled 
100 percent of the time at a location that is owned, operated, or 
controlled by the covered fleet operator, or is under contract with the 
covered fleet operator. See 40 CFR 88.302-94. The proposed de minimis 
exemption for limited operation on conventional fuel described above 
would not affect this definition of ``centrally fueled'', because the 
de minimis exemption would allow only limited operation in emergency 
circumstances. A fleet operator would still need to determine whether, 
in normal circumstances, its covered fleet vehicles are centrally 
fueled 100 percent of the time.
    EPA considered two modifications to the definition of dedicated 
vehicle to allow limited operation on conventional fuel. EPA considered 
proposing to modify the definition of a dedicated fueled vehicle to 
allow vehicles to be equipped with a fuel tank that would allow a range 
of operation of 50 statute miles. This would require the replacement of 
the existing gasoline tank with a tank of approximately two-gallon 
capacity. However, the act of removing an existing fuel tank that has 
met the crash tests and other testing required by the National Highway 
Transportation Safety Administration (NHTSA) <SUP>10</SUP> could 
require another set of vehicle crash tests with any vehicle using a 
``new'' fuel tank system, and the cost of conducting another set of 
vehicle crash tests may deter manufacturers from modifying vehicles in 
this manner.
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    \10\ Reference NHTSA's rules found at 49 CFR Part 555.
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    An alternative modification EPA considered proposing is retention 
of the existing fuel tank and use of a timer to restrict fuel usage. 
The timer could allow a maximum of one hour of operation on gasoline 
followed by a period of time the vehicle could not operate on gasoline. 
Manufacturers would be required to program these time periods into one 
of the vehicle's computers. The choice of one hour of operation is 
roughly equivalent to the 50-mile range criterion, based on the 
combined fuel economy values and an assumed vehicle average speed of 50 
miles-per-hour.
    To provide maximum flexibility to manufacturers and fleet 
operators, EPA is proposing to amend definition of a dedicated vehicle 
to allow both of these approaches: clean fuel vehicles equipped with a 
timer that limits operation on gasoline to one hour at a time, and 
clean fuel vehicles equipped with a fuel tank with fuel capacity of no 
more than 50 miles of operation on gasoline, will be included in the 
definition of a dedicated vehicle. Because the use of conventional fuel 
is intended for emergency use only, and the operation on conventional 
fuel is expected to be an exception, no emission or fuel economy 
testing would be required on these vehicles with conventional fuel.
    The proposed revision to the definition of dedicated fuel systems 
would apply only to light-duty vehicles and light-duty trucks, because 
EPA has not adopted heavy-duty flexible and dual fueled Clean-Fuel 
vehicle standards. See 59 FR 50050 (September 30, 1994).

B. Engine Family Criteria and Assigned Deterioration Factors

    Manufacturers and aftermarket converters have expressed concerns to 
EPA regarding the overall burden of complying with EPA's certification 
regulations for vehicles converted to operate on a clean alternative 
fuel for the purpose of meeting EPA's CFV emissions standards. The 
burdens identified relate to the cost of certifying each engine family 
and the narrowness of the criteria under which exhaust emission control 
systems are classified into engine families.<SUP>11</SUP>
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    \11\ 40 CFR 86.096-24.
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    Because of the diversity in marketing requirements, a number of 
engine families, with limited sales, would be created under current 
regulations to meet consumer needs. Currently EPA provides for relief 
from full useful life deterioration factor (DF) requirement for engine 
families with a combined total sales of no more than 10,000 vehicles or 
engines.<SUP>12</SUP> In today's action EPA is proposing to adopt 
similar provisions, applicable thru MY 2001, for vehicles and engines 
certified to EPA's CFV emissions standards.
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    \12\ 40 CFR 86.094-24(e)(2).
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    The costs identified by the OEM and aftermarket conversion 
manufacturers were the actual costs associated with certifying each 
engine family. Costs attributed to certifying each engine family are 
development costs, testing costs, and certification fees. Various 
aftermarket conversion entities have estimated the costs of generating 
DFs to be in excess of $1 million for each engine family. While EPA 
does not have data to corroborate these cost estimates, the Agency 
believes that the cost of generating DFs is significant, but expects it 
is well below $1 million per engine family. EPA's current regulations 
for small volume engine family certification allow manufacturers to use 
assigned DFs generated by EPA. See 40 CFR 86.096-24(e)(2) Manufacturers 
may also use Dfs they have generated using good engineering judgment. 
See 40 CFR 86.094-14(c)(7)(i)(C)(2)(i). In today's action, EPA is 
proposing to amend the regulations that clarify these options are also 
available for CFV small-volume engine families. In September, 1995, EPA 
issued a guidance letter to manufacturers containing assigned DFs for 
gaseous fueled vehicles. In general, EPA expects that manufacturer's 
use of these assigned DFs for gaseous fueled CFVs would qualify as DFs 
generated using good engineering judgment under the regulatory 
provision adopted today.
    EPA is proposing to amend the provisions that allow grouping of 
certain CFV engine families into an engine family class. The criteria 
for such grouping is described below. EPA expects that this proposed 
action would serve to encourage production of CFVs for fleet operators 
to purchase and use to meet state CFFP purchase requirements by 
reducing the amount of testing needed for certification of CFVs. This 
would allow manufacturers to introduce a greater number of CFV models 
desired by fleet owners without incurring additional testing costs.
    Fleet vehicles must be able to perform a wide variety of duties, 
such as meter-reading tasks, service repair, making deliveries, 
transporting passengers, etc. Therefore, for a manufacturer or 
aftermarket converter to be competitive in the clean fuel vehicle fleet 
market, multiple engine families need to be certified for different 
needs.
    Currently, vehicle grouping for the purpose of certification is 
accomplished though the application of the ``engine family'' and 
``emission control system'' definitions in the regulations. Today's 
proposal would establish a new definition for grouping engine families: 
engine family class. An engine family class would be defined as engines 
sharing the following common characteristics: (1) Meeting LEV, ILEV, 
ULEV, or ZEV emission standards in 40 CFR Part 88, (2) same car line 
name, (3) all engines have engine displacements within a range of 0.8L 
<SUP>13</SUP> less than the displacement of the engine used for 
certification testing, (4) same catalyst construction, (5) same type of 
precious metals used in the catalyst, and (6) same

[[Page 38770]]

relative engine/catalyst size and loading rates.
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    \13\ See EPA Advisory Circular 17F, page 9, which can be found 
in the docket for this rulemaking action.
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    EPA is proposing to amend the criteria for engine family classes to 
reduce the certification burden for CFVs and to combine vehicles which 
are likely to exhibit similar exhaust emission deterioration over their 
useful lives, based on the characteristics of current-technology 
vehicles that most significantly affect the deterioration of emission 
control over time. Each engine family class would be certified using 
separate emission compliance data and a separate certificate of 
conformity would be required for each engine family class.
    The engine family concept was originally developed as a way to 
combine vehicles of similar emission deterioration rates. At that time 
(in the early 1970's), the use of catalytic converters was less 
prevalent and most emission reductions occurred though modifications to 
the engine operating characteristics. For these vehicles, all emission 
deterioration was due to increases in emissions coming directly out of 
the engine (called ``engine-out'' emissions). Consequently, the 
definition of engine family focused on engine-based parameters. Since 
that time, there have been many advances in exhaust emission control 
technology which have made the engine family concept less useful for 
the purposes of grouping vehicles together on the basis of emission 
deterioration.
    In today's vehicles, most emission control is accomplished through 
catalytic conversion of the exhaust while the engine is controlled to 
operate within carefully controlled air/fuel ratios to ensure optimum 
catalyst efficiency. While manufacturers have demonstrated that 
essentially no engine-out deterioration is experienced in their current 
product, the mating of the catalyst with the engine is extremely 
important. Appropriate sizing of the catalyst to the engine is critical 
to achieve an appropriate catalyst residence time (the time the exhaust 
gases remain in the catalyst) so that the catalytic reaction has time 
to be completed. Adequate levels of precious metal loading and 
appropriate dispersion are necessary to provide the active sites for 
conversion and achieve the desired conversion rates. Also, the catalyst 
must be placed in a temperature environment that allows it to quickly 
come to operating temperature but does not expose it to damaging 
amounts of high temperature during in-use driving.
    The proposed engine family class definition takes into account the 
changes in emission control technology by shifting the focus away from 
engine parameters to the ability of the overall engine and emission 
control system to meet LEV, or better, standards. This single 
requirement of focusing on a more stringent emission standard would 
require the matching of the catalyst to the engine. The Agency believes 
that the proposed engine family class definition would comprise an 
effective emission control program and result in significant 
environmental benefits by giving manufacturers additional incentives to 
produce and market a broader range of vehicles and engines that meet 
the CFV standards.
    EPA is proposing to provide this newly created engine family class 
criteria through model year 2001, by which time EPA expects that 
manufacturers would have had several years to assess the market 
requirements and should be able to more accurately predict which 
vehicle models, out of approximately 400 engine families currently 
certified, fleet owners need and consumers favor. Manufacturers would 
then know which engine families to focus certification testing on, 
rather than certifying a variety of engine families. EPA currently 
intends to propose new certification procedures for all light-duty 
vehicles and light-duty trucks for application in model year 2000. If 
these expected actions are delayed, the applicability of the definition 
proposed in this notice could be extended in a subsequent rule.
    EPA notes that the proposed requirement that all engines in an 
engine family class have the same type of catalyst precious metal 
loading would apply only to OEMs. EPA is aware that catalysts are built 
to the OEM's specifications, and that the actual amount and ratio of 
precious metals in the catalyst is often considered confidential 
business information that cannot be obtained by an aftermarket 
converter who purchases a vehicle manufactured by an OEM to convert it 
to operate on a clean alternative fuel. EPA believes that the remaining 
criteria for grouping engines into an engine family class are 
sufficient to ensure that vehicles and engines converted to operate on 
a clean alternative fuel have similar emissions characteristics and 
that it would be appropriate to group such vehicles and engines 
together. Because manufacturers can only group vehicles that are in the 
same car line, and have similar engine displacements, catalyst 
construction, etc., it is unlikely that vehicles or engines that share 
those common characteristics will have different catalyst precious 
metal loadings. In the event that EPA has reason to believe that, in 
spite of meeting the other criteria, an aftermarket converter is 
attempting to group engines with different precious metal loadings, EPA 
is proposing to reserve the right to limit engine family groupings by 
aftermarket conversion companies if the Agency has reason to believe 
that the proposed engine family grouping would result in an engine 
family class containing engine families that are so dissimilar that 
such grouping is not appropriate. Since the Agency's belief could be 
based on information that is protected by confidential business 
practices, EPA could not necessarily disclose this information to the 
aftermarket conversion company. Based on a review of engine families 
from previous model years, the Agency does not believe this scenario is 
likely to occur but has decided to propose such a provision due to the 
theoretical possibility of the scenario occurring in the future.

C. Fees

    Today's action proposes to amend the current fee schedule in 40 CFR 
Part 86, Subpart J by proposing exemptions from certification fee 
requirements. The exemption (through MY 2001) is proposed for vehicles 
and engines using certified to LEV, ULEV, ILEV, or ZEV, emission 
standards in 40 CFR Part 88 under the small-volume certification 
procedures in 40 CFR 86.094-14. In addition, a fee exemption is 
provided through MY 2001 for dedicated gaseous fuel systems meeting 
Tier 1 emission standards.
    The Act authorizes EPA to promulgate (and from time to time revise) 
regulations establishing fees to recover all reasonable costs to the 
Agency associated with (1) certification of new vehicles or engines 
under section 206(a) or under part C of Title II of the Act, (2) 
compliance monitoring and testing under section 206(b) or part C, and 
(3) in-use compliance monitoring and testing under section 207(c) of 
part C. Section 217 of the Act requires such fees to be consistent with 
the Independent Offices Appropriation Act (IOAA), 37 U.S.C. 9701 et 
seq., and requires that the Agency's fee schedule be based on such 
factors as the Administrator finds appropriate, equitable, and 
nondiscriminatory (including the number of vehicles or engines produced 
under a certificate).
    Pursuant to its authority under section 217, EPA established a fee 
schedule to recover costs associated with the activities described 
above. This fee schedule currently applies to light-duty vehicles, 
light-duty trucks, heavy-duty vehicles, heavy-duty engines, and 
motorcycles, regardless of the emissions standards to which such 
vehicles are

[[Page 38771]]

certified. Current EPA regulations provide for a partial fee waiver for 
certification requests where the full fee exceeds one percent of the 
aggregate projected retail sales price of vehicles that the certificate 
would cover. If EPA grants a waiver, the applicable fee would be 
equivalent to one percent of the aggregate projected retail sales price 
of the vehicles or engines covered by the certification request.
    The first exemption proposed today is for vehicle technologies 
certifying to LEV, ULEV, ILEV, or ZEV emissions standards in 40 CFR 
88.104-94 and 88.105-94. This proposed exemption is consistent with 
Section 217 of the CAA, and with the IOAA. Section 217 requires EPA's 
fee schedule to be based on factors that the Administrator finds are 
``appropriate and equitable and nondiscriminatory.'' Section 217 also 
requires EPA's fee regulations to be consistent with the IOAA. The IOAA 
states that ''* * * [I]t is the sense of Congress that each service or 
thing of value provided by an agency * * * is to be self-sustaining to 
the extent possible.'' In addition, the IOAA authorizes agency heads to 
adopt regulations establishing a fee for such ``services or things of 
value'' provided by the agency. Such fees must be fair, and must be 
based on the following factors: (1) Cost to the government, (2) value 
of the service or thing to the recipient, (3) public policy or interest 
serviced, and (4) other relevant facts.
    The proposed exemption from certification fees for vehicles and 
engines certified as LEVs, ILEVs, ULEVs, and ZEVs emission standards is 
consistent with the IOAA. The IOAA does not require agencies to be 
completely self-sustaining, but only ``to the extent possible.'' In 
establishing fees, it is appropriate for EPA to weigh its broad purpose 
under the CAA of protecting the nation's air quality against the sense 
of Congress that agencies should be self-sustaining to the extent 
possible. See Aeronautical Radio v. Federal Communications Commission, 
335 F.2d. 304 (7th Cir., 1964). While EPA recognizes that the Agency 
would incur costs in issuing certificates for such vehicles, and in 
assuring compliance with the applicable emissions standards, the 
proposed fee exemption is consistent with Congressional intent to 
encourage the development and production of clean-fuel vehicles for 
state clean-fuel fleet programs, and with the broader long-term goal of 
encouraging the penetration of clean-fuel vehicles in the national 
vehicle market. These are valid public policy interests that may be 
considered as a factor in setting fees under the IOAA in a manner that 
furthers such interests.
    The proposed fee exemption for Tier 1 alternative fuel vehicles is 
also consistent with Section 217 of the CAA and with the IOAA. As 
described above, the IOAA does not require agencies to be completely 
self-sustaining, but only to ``the fullest extent possible,'' and it is 
appropriate for EPA to weigh its broad purpose under the CAA of 
protecting air quality against the sense of Congress that agencies 
should be self-sustaining to the extent possible. While EPA recognizes 
that the Agency would incur costs in issuing certificates for such 
vehicles and in assuring compliance with the applicable emissions 
standards, the proposed fee exemption is consistent with EPA's broad 
purpose of protecting air quality. Although these vehicles would be 
certified to Tier 1 emissions standards, rather than to the more 
stringent CFV emissions standards, all fuel systems for a gaseous-fuel 
would have lower evaporative emissions than gasoline fueled vehicles 
because these fuel systems are ``closed'' fuel systems under pressure. 
These closed fuel systems are the only fuel systems thus far that have 
been able to demonstrated compliance with the lower evaporative 
emission standards required for ILEV evaporative emission compliance. 
Even though the operating fuel system on these vehicles and engines 
will have a fuel system that is similar to systems meeting ILEV 
evaporative standards, these vehicles could also have an emergency 
supply of conventional fuel and still qualify as dedicated vehicles if 
EPA finalized the proposed revisions to the definition of dedicated 
vehicle discussed in section C. 1. above. Lower evaporative emissions 
can still be expected from such vehicles because they will carry lower 
volumes of conventional fuel than do dedicated conventional fuel 
vehicles. In addition, there will be lower refueling losses because the 
conventual fuel is an emergency only fuel supply and will be 
replenished infrequently. Therefore, it would be appropriate and 
consistent with EPA's broad purpose of reducing emissions that result 
in air pollution problems for the Agency to waive certification fees 
for gaseous-fueled Tier 1 vehicles as a means to encourage 
manufacturers to produce such vehicles. Moreover, EPA expects that some 
CFVs purchased by fleet operators towards compliance with requirements 
of CFFPs will be gaseous-fueled CFVs, and encouraging production of 
gaseous-fueled Tier 1 vehicles would assist those fleet operators that 
choose gaseous-fueled CFVs by promoting and supporting the gaseous fuel 
fueling infrastructure.
    The current fee structure is based on recovering EPA's cost for 
each engine family. Current regulations rules do allow for partial 
waiver of the full fee. This waiver requires the manufacturer to pay 1 
percent of the retail value of the vehicle up to a full fee. The net 
result is for any engine family with expected annual sales of 
approximately 100 units, the manufacturers would be required to pay the 
full certification fee. For aftermarket conversions, however, the one 
percent of the retail value criterion is based on the sales price of 
the converted vehicle, and does not reflect the cost of procuring the 
pre-conversion vehicle or engine. The conversion process may add $5,000 
to the vehicle's pre-conversion cost. The retail value of the converted 
vehicle may be anywhere from $10,000 for a LDV to $20,000 for a pickup 
truck. The fee the aftermarket conversion manufacturer pays is based on 
the total retail value of the vehicle, not just the value added. 
Therefore, if the retail value of the converted vehicle is $25,000 the 
fee under the current waiver provision would be 1 percent of $25,000, 
or $250. If the convertor expects to sell at least 100 converted 
vehicles, it would have to pay the full certification fee of $23,741.00 
.
    For the 1997 model year <SUP>14</SUP> EPA certified 12 engine 
families to LEV, ILEV, ULEV, and ZEV emission standards; three LDV's, 
four LDT's, and five HDE's. The total fees paid to EPA for these 12 
engine families amount to less than $250,000. Since few gaseous-fueled 
engine families have been certified to Tier 1 emissions standards, EPA 
does not expect the cost of the fee waiver proposed for Tier 1 gaseous-
fueled vehicles and engines would be significant. The cost of the 
proposed fees exemptions would not be passed on to other manufacturers.
---------------------------------------------------------------------------

    \14\ As of May 30, 1997.
---------------------------------------------------------------------------

    In today's action, EPA is proposing a fee exemption for any engine 
family certified to Federal LEV, ILEV, ULEV, or ZEV emissions standards 
in 40 CFR Part 88. The proposed fee exemption, applicable through MY 
2001, would be expected to result in a greater number of engine 
families and vehicles available for fleet operators to purchase and use 
to comply with the requirements of Clean-Fuel Fleet Programs. In 
addition, today's proposal is intended to reduce the overall burden of 
certifying clean-fuel vehicles and to provide additional incentive to 
both OEM and aftermarket converters to certify vehicles and engines 
that meet the CFV emission standards.

[[Page 38772]]

    This proposed exemption would apply through MY 2001 because EPA 
expects that such incentive will not be needed after MY 2001 as the 
production and sales of CFVs by that time should be at a level such 
that the amount of fees paid to EPA can easily be amortized over the 
total sales. EPA would apply this exemption in an equitable, 
nondiscriminatory manner--any manufacturer of a small volume engine 
family certified to LEV, ULEV, ILEV, or ZEV emissions standards under 
40 CFR Part 88 would be eligible to receive an exemption.

III. Administrative Requirements

A. Administrative Designation

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the 
Agency must determine whether this proposed regulatory action is 
``significant'' and therefore subject to Office of Management and 
Budget (OMB) review and, the requirements of the Executive Order. The 
order defines ``significant regulatory action'' as one that is likely 
to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect, in a material way, the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, EPA has determined 
that this proposed action is not a ``significant regulatory action'' 
within the meaning of the Executive Order, and is therefore not subject 
to OMB review. Today's action proposes to amend current regulations to 
streamline the certification process for manufacturers of Clean Fuel 
vehicles and dual fuel gaseous fueled vehicles and engines.

B. Regulatory Flexibility

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule of any rule 
subject to notice and comment rulemaking requirements unless the agency 
certifies that the rule will not have significant economic impact on a 
substantial number of small entities. Small entities include small 
business, small not-for-profit enterprises, and small governmental 
jurisdictions. This proposed rule would not have significant impact on 
a substantial number of small entities because today's proposed action 
would not impose any new requirements on small entities. In fact, this 
proposal would reduce the costs of certification for all entities, 
including small entities, that manufacturers of CFVs, as well as 
reducing costs for all entities that convert conventional vehicles to 
vehicles that operate on gaseous and other fuels, including small 
entities that perform such actions. Therefore, I certify that this 
action will not have a significant economic impact on a number of small 
entities.

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``UMRA'') signed into law on March 22, 1995, EPA must prepare a 
written statement to accompany any rule where the estimated costs to 
State, local, or tribal governments, in the aggregate, or to the 
private sector, will be $100 million or more in any one year. Under 
section 205, for any rule subject to section 202, EPA must select the 
most cost-effective and least burdensome alternative that achieves the 
objective of the rule and that is consistent with statutory 
requirements. Section 203 requires EPA to establish a plan for 
informing and advising any small governments that may be significantly 
and uniquely impacted by the rule.
    EPA has determined that this proposed rule does not trigger the 
requirements of UMRA. The proposed rule does not include a Federal 
mandate that may result in estimated annual costs to State, local, or 
tribal governments in the aggregate, or to the private sector, of $100 
million or more, and it does not propose regulatory requirements that 
may significantly or uniquely affect small governments. Therefore, this 
proposed rule does not trigger the requirements of UMRA.

D. Reporting and Recordkeeping Requirement

    Today's proposal does not impose any new information collection 
burden. The Office of Management and Budget (OMB) has previously 
approved the information collection requirements under the provisions 
of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. And has assigned 
OMB control number 2060-0104 (EPA ICR No. 0783).
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instruction; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search for data sources; complete and review the collection of 
information; and transmit or otherwise disclose the information.
    Copies of the ICR document(s) may be obtained from Sandy Farmer, 
OPPE Regulatory Information Division; EPA; 401 M St., SW. (mail code 
2137); Washington, DC 20460 or by calling (202) 260-2740. Include the 
ICR and/or OMB number in any correspondence.

E. Environmental and Economic Impacts

    This proposal will have no adverse effects on air quality, since 
all current emissions standards and requirements would continue to 
apply to vehicles and engines affected by today's action. EPA believes 
that this proposed action would encourage manufacturers to develop and 
market vehicles and engines with innovative, new emissions control 
technology, ultimately resulting in broader market penetration of CFVs 
and clean alternative fuels.
    By proposing to waive certification fees for qualifying vehicles, 
this proposed action would reduce the regulatory burden on industry 
without adversely affecting air quality.

F. Protection of Children From Environmental Health Risks and Safety 
Risks

    This proposed rule is not subject to E.O. 13045, entitled 
``Protection of Children from Environmental Health Risks and Safety 
Risks (62 FR 19885, April 23, 1997), because it does not involve 
decisions on environmental health risks or safety risks that 
disproportionately affect

G. Public Participation

1. Comments and the Public Docket
    EPA welcomes comments on all aspects of this proposed rulemaking. 
All comments, with the exception of proprietary information should be 
addressed to the EPA Air Docket Section, Docket No. A-97-27 (see 
ADDRESSES).
    Commenters who wish to submit proprietary information for

[[Page 38773]]

consideration should clearly separate such information from other 
comments by (1) labeling proprietary information ``Confidential 
business Information'' and (2) sending proprietary information directly 
to the contact person listed (see FOR FURTHER INFORMATION CONTACT) and 
not to the public docket. This would help insure that proprietary 
information is not inadvertently placed in the docket. If a commenter 
wants EPA to use a submission labeled as confidential business 
information as part of the basis for the notice of proposed rulemaking, 
then a non-confidential version of the document, which summarizes the 
key data or information, should be sent to the docket.
    Information covered by a claim of confidentiality will be disclosed 
by EPA only to the extent allowed and by the procedures set forth in 40 
CFR Part 2. If no claim of confidentiality accompanies the submission 
when it is received by EPA, the submission may be made available to the 
public without notifying the commenters.
2. Public Hearing
    Any person can request EPA to hold a public hearing on this 
proposed action, but such request must be received by August 19, 1998. 
Because no hearing will occur, absent a request for one, interested 
parties should contact Clifford D. Tyree at the number listed below 
after August 19, 1998 to determine whether a hearing will take place.

IV. Statutory Authority

    Authority for the actions set forth in this notice of proposed 
rulemaking is granted to the EPA by sections 202, 203, 206, 207, 217, 
241, 242, 243, 244, 245, 246, 247, and 301(a) of the Clean Air Act as 
amended (15 U.S.C. 2001, 2002, 2003, 2005, 2006, 2013; 42 U.S.C. 7521, 
7522, 7524, 7525, 7541, 7542, 7549, 7550, and 7601(a)).

List of Subjects in 40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Labeling, Motor vehicle pollution, 
Reporting and recordkeeping requirements.

    Dated: July 8, 1998.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble, chapter I, title 40 of the 
Code of Federal Regulations is proposed to be amended as follows:

PART 86--[AMENDED]

    1. The authority citation for part 86 continues to read as follows:

    Authority: 42 U.S.C. 7401-7671q.

    2. Section 86.090-2 of Subpart A is amended by revising the 
definition of ``Dedicated vehicle (or engine)'' to read as follows:


Sec. 86.090-2  Definitions.

* * * * *
    Dedicated vehicle (or engine) means, any motor vehicle (or motor 
vehicle engine) engineered and designed to be operated using a single 
fuel. Flexible fuel vehicles and multi-fuel vehicles are not dedicated 
fuel vehicles. Through model year 2001, motor vehicles (or motor 
vehicle engines) capable of operating on a second fuel through use of 
one of the options listed in paragraphs (1) and (2) of this definition 
are dedicated vehicles (or engines):
    (1) Vehicles or engines certified to Tier 1, LEV, ULEV, ILEV, or 
ZEV that are capable of operation on a conventional fuel for a maximum 
of one hour during a three-hour period.
    (2) Vehicles or engines certified to Tier 1, LEV, ULEV, ILEV, or 
ZEV that are capable of operation on a conventional fuel no more than 
50 miles on a conventional fuel limited either by fuel tank capacity or 
tamper-proof electronic software.
* * * * *
    3. Section 86.096-24 of Subpart A is amended by revising paragraph 
(a)(2) introductory text and adding new paragraphs (c)(4), (c)(5), 
(e)(1), (i), and (j) to read as follows:


Sec. 86.096-24  Test vehicles and engines.

    (a) * * *
    (2) To be classed in the same engine family, engines must be 
identical in all the respects listed in paragraphs (a)(2)(i) through 
(x) of this section or, at the manufacturers option, as allowed in 
paragraphs (i) and (j) of this section.
* * * * *
    (c) * * *
    (4) Light-duty vehicles and light-duty trucks applying for a 
certificate of conformity with Clean-Fuel vehicle emissions standards 
in 40 CFR part 88. This paragraph (c)(4) applies to engines, systems, 
or components used to establish exhaust emission deterioration factors 
for light-duty vehicle and light-duty truck small volume engine 
families certified to LEV, ILEV, ULEV, or ZEV emissions standards in 40 
CFR part 88.
    (i) For light duty vehicles, the Administrator shall select the 
vehicles, engines, systems, or components to be used to determine 
exhaust emission deterioration factors for each engine family or engine 
family class control system combination using the criteria in paragraph 
(c)(1) of this section, or, alternatively, by selecting the vehicle 
with the largest projected sales volume in the engine family or engine 
family class.
    (ii) For light duty trucks, the manufacturer shall select the 
vehicles, engines, systems, or components to be used to determine 
exhaust emission deterioration factors for each engine family or engine 
family class control system combination using the criteria in paragraph 
(c)(2) of this section, or alternatively, by selecting the vehicle with 
the largest projected sales volume in the engine family or engine 
family class.
    (iii) For light duty vehicles, service accumulation procedures must 
comply with one of the following:
    (A) 40 CFR 86.094-26 (a); or
    (B) 40 CFR 86.094-14 (c)(7)(i)(C).
    (iv) For light duty trucks, service accumulation procedures must 
comply with one of the following:
    (A) 40 CFR 86.094-26 (b) and (d); or
    (B) 40 CFR 86.094-14 (c)(7)(i)(C).
    (5) Heavy-duty engines applying for a certificate of conformity 
with Clean-fuel vehicle emissions standards in 40 CFR part 88. This 
paragraph (c)(5) applies to engines, systems, or components used to 
establish exhaust emission deterioration factors for small volume 
heavy-duty engine families certified to LEV, ILEV, ULEV, or ZEV 
emissions standards in 40 CFR part 88.
    (i) The manufacturer shall select the vehicles, engines, systems, 
or components to be used to determine exhaust emission deterioration 
factors for each engine family or engine family class control system 
combination using the criteria in paragraph (c)(3) of this section, or 
alternatively, by selecting the engine with the largest projected sales 
volume in the engine family or engine family class.
    (ii) Service accumulation procedures must comply with one of the 
following:
    (A) 40 CFR 86.094-26(c) and (d);
    (B) 40 CFR 86.094-14 (c)(7)(i)(C); or
    (C) The engine must be operated at maximum power and maximum fuel 
rate for 500 engine hours. Three tests, equally spaced, shall be used 
to extrapolate deterioration factors.
* * * * *
    (e)(1) Any manufacturer may request to certify engine families, 
with combined total U.S. sales of vehicles and engines fewer than 
10,000 units, for the model years 1999 through 2001, to the clean-fuel 
vehicle standards prescribed in 40 CFR 88.104-94 and

[[Page 38774]]

88.105-94, under the provisions of Sec. 86.094-14, in addition to the 
vehicles certified under paragraph (e)(2) of this section.
* * * * *
    (i) For light duty vehicles and light duty trucks, small volume 
engine families certified to LEV, ULEV, ILEV, or ZEV emissions 
standards in 40 CFR part 88 may be grouped into an engine family class, 
provided that:
    (1) For original equipment manufacturers, the following criteria 
are met:
    (i) Vehicles are all certified to the same emissions standards 
prescribed in 40 CFR 88.104-94.
    (ii) The maximum range of engine displacement is less than or equal 
to 0.8 liters of the largest displacement in the class.
    (iii) Same type of catalyst (e.g., beads or monolith).
    (iv) Same precious metal composition of the catalyst by the type of 
principle active material(s) used (e.g., platinum based oxidation 
catalyst, palladium based oxidation catalyst, platinum and rhodium 
three-way catalyst, palladium and rhodium three-way catalyst).
    (v) The ratios of [(catalysts volume/displacement)  x  (catalyst 
loading rate)] of all catalysts is within 25 percent or 0.2 g/liter of 
each other.
    (2) For aftermarket conversions, the following criteria are met:
    (i) Vehicles are all certified to the same emissions standards 
prescribed in 40 CFR 88.104-94.
    (ii) The maximum range of engine displacement is less than or equal 
to 0.8 liters of the largest displacement in the class.
    (iii) Same type of catalyst (e.g., beads or monolith).
    (iv) All carlines or engine models were included on the certificate 
for the pre-conversion configuration.
    (3) Vehicles certifying to more than one set of emission standards 
specified in this paragraph (i) may be grouped into a single engine 
family class, as provided in paragraphs (i)(1) and (i)(2) of this 
section. For example, a manufacturer may certify a vehicle to both ULEV 
and ILEV standards, or to both ZEV and ILEV standards.
    (j) For heavy duty engines, small volume engine families certified 
to LEV, ULEV, or ZEV emissions standards in 40 CFR 88.105-94 may be 
grouped into an engine family class, provided that:
    (1) For original equipment manufacturers, the following criteria 
are met:
    (i) The engines meet the requirements of paragraphs (a)(2)(iv) 
through (a)(2)(x) of this section.
    (ii) The maximum range of engine displacement is less than or equal 
to 0.8 liters of the largest displacement in the class.
    (iii) Same type of catalyst (e.g., beads or monolith).
    (iv) Same precious metal composition of the catalyst by the type of 
principle active material(s) used (e.g., platinum based oxidation 
catalyst, palladium based oxidation catalyst, platinum and rhodium 
three-way catalyst, palladium and rhodium three-way catalyst).
    (v) The ratio of [(catalysts volume/displacement)]  x  [catalyst 
loading rate] of all combinations is within 25% or .2 g/liter.
    (2) For aftermarket conversions, the following criteria are met:
    (i) The maximum range of engine displacement is less than or equal 
to 0.8 liters of the largest displacement in the class.
    (ii) Same type of catalyst (e.g., beads or monolith).
    (iii) All carlines or engine models were included on the 
certificate for the pre-conversion configuration.
    4. Section 86.099-2 is added to subpart A to read as follows:


Sec. 86.099-2  Definitions.

    The definitions of Sec. 86.098-2 continue to apply to 1998 and 
later model year vehicles. The definitions listed in this section apply 
beginning with the 1999 model year.
    Engine Family Class means:
    (1) A grouping of vehicles or engine families that meets the 
following criteria:
    (i) Dedicated vehicles or engines that meet LEV, ILEV, ULEV, or ZEV 
emission standards in 40 CFR 88.104-94 or 88.105-94.
    (ii) The maximum range of engine displacement is not more than 0.8L 
of the largest displacement tested in the class.
    (iii) Same type of catalyst.
    (iv) Same principle active precious metal.
    (v) The ratios of [(catalysts volume/displacement)  x  (catalyst 
loading rate)] of all catalysts is within 25 percent or 0.2 g/liter of 
each other.
    (vi) For aftermarket conversions, all carlines or engine models 
were included on the certificate for the pre-conversion configuration.
    (2) This definition is applicable for model years 1999 through 
2001.
    5. Section 86.908-93 of Subpart J is amended by adding paragraph 
(d) to read as follows:


Sec. 86.908-93  Waivers and refunds.

* * * * *
    (d)(1) For model years 1999 through 2001, the required fees under 
this subpart shall be waived for any light-duty vehicle, light-duty 
truck, or heavy-duty engine family that meets the following 
requirements:
    (i) Is a dedicated vehicle or engine;
    (ii) Is seeking certification to LEV, ILEV, ULEV, or ZEV emissions 
standards in 40 CFR part 88; and
    (iii) Meets the small volume sales requirements of Sec. 86.094-
14(b) or Sec. 86.094-24(e).
    (2) If the manufacturer does not receive a certificate of 
conformity with the LEV, ILEV, ULEV, or ZEV emissions standards in 40 
CFR part 88, the fee requirements of this section will apply. Before 
any certificate can be issued, the applicable fee must be paid.

[FR Doc. 98-18860 Filed 7-17-98; 8:45 am]
BILLING CODE 6560-50-P


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